nep-tid New Economics Papers
on Technology and Industrial Dynamics
Issue of 2019‒09‒16
nine papers chosen by
Fulvio Castellacci
Universitetet i Oslo

  1. R&D and firm resilience during bad times By Maria Garcia-Vega; Oscar Vicente-Chirivella
  2. Multidimensional relatedness between innovation systems in sustainability transitions By Tuukka Mäkitie; Allan D. Andersen; Jens Hanson
  3. Why do R&D-intensive firms participate in standards organizations? The role of patents and product-market position By Justus Baron; Cher Li; Shukhrat Nasirov
  4. Green Public Procurement and the Innovation Activities of Firms By Vera Zipperer
  5. Modular structure in labour networks reveals skill basins By Neave O'Clery; Eoin Flaherty; Stephen Kinsella
  6. Visibility of technology and cumulative innovation: Evidence from trade secrets laws By Ganglmair, Bernhard; Reimers, Imke
  7. The macroeconomic consequences of artificial intelligence: A theoretical framework By Huang, Xu; Hu, Yan; Dong, Zhiqiang
  8. The Emergence of Innovation Complexity at Different Geographical and Technological Scales By Emanuele Pugliese; Lorenzo Napolitano; Matteo Chinazzi; Guido Chiarotti
  9. Innovation union: Costs and benefits of innovation policy coordination By Teodora Borota; Fabrice Defever; Giammario Impullitti

  1. By: Maria Garcia-Vega; Oscar Vicente-Chirivella
    Abstract: In this paper, we empirically investigate how technology transfers from universities to private firms influence firm innovativeness. Using data on R&D acquisitions from universities of more than 10,000 Spanish firms for the period 2005-2013 and applying propensity score matching techniques and DiD estimations, we find that technology transfers from universities strongly increase firm innovativeness. We next explore heterogeneous effects in order to analyse whether these gains are mediated by firm size and the business cycle. Our results suggest that the contribution of universities to firm innovation is particularly important for small firms, during the whole business cycle and it goes beyond its direct effect on innovation: We find that technology transfers from universities generate positive spillovers and enhance firms’ internal R&D capabilities. Our results suggest that the knowledge generated by universities makes an important contribution to economic growth through technology transfers, which makes firms more innovative. Hence, knowledge creation by universities provides an important public good.
    Keywords: Universities, Technology Transfers, Innovation, Firms
    Date: 2019
  2. By: Tuukka Mäkitie; Allan D. Andersen; Jens Hanson
    Abstract: Recent literature in sustainability transition studies has suggested that established industries may provide resources for innovation in low-carbon technologies. This literature, however, has this far not explained why such resource redeployment takes place. Literature in evolutionary economic geography and management studies, however, have discussed such interactions through the notion of relatedness as an underlying factor. Drawing on these literatures we develop an integrated framework for the analysis of multidimensional relatedness between innovation systems in the context of sustainability transitions. Using semi-structured interviews, we study the technological, institutional and network relatedness between the oil and gas industry and the offshore wind power technology in Norway. Our results show that despite the high relatedness in offshore technologies, low relatedness in terms of institutions has challenged the resource redeployment from the Norwegian oil and gas industry to offshore wind power. We thus suggest that relatedness, understood in multiple structural dimensions, can help to understand why resource redeployment from established industries to technological innovation systems may, or may not, take place.
    Keywords: multidimensional relatedness, innovation systems, sustainability transitions, oil and gas industry, offshore wind power
    JEL: O33 Q55
    Date: 2019–09
  3. By: Justus Baron; Cher Li; Shukhrat Nasirov
    Abstract: This paper examines the determinants of participation of R&D-intensive firms in standards development. Using data on R&D spending, patent, and trademark activities of the world's largest corporate R&D investors and their membership of standards organizations, we find a highly robust positive association between a firm's R&D spending and its participation in standards development. However, the causal effect of R&D spending on membership of standards organizations is conditional upon the firm's patent and/or product-market position, and varies across different types of standards organizations. More specifically, a strong patent position amplifies the effect of R&D spending on participation in standards-developing organizations, while a strong product-market position strengthens the impact of R&D spending on participation in the organizations that promote established standards. Finally, we also show that policy changes that increase the value of patents, such as variations in the preferential tax treatment of patent-related revenue, induce R&D-intensive firms to intensify their participation in standards organizations.
    Keywords: standards organizations, R&D expenditure, patents, trademarks
    Date: 2019
  4. By: Vera Zipperer
    Abstract: This paper provides first empirical insights on the relationship between green public procurement (GPP) and firms' innovation activities. Considering that the public sector is a large buyer in the economy, public procurement is able to work as demand-pull factor for new products and thus innovations - given that the procurement is aimed at such objectives. GPP is specifically implemented to contribute to more sustainable production and consumption. Using a novel firm-level dataset, this paper analyses whether GPP is able to trigger innovation activities within firms, and if so, whether these innovations are environmental innovations or not. The results show some support for a demand-pull effect of GPP on the probability of general product innovations but no conclusive evidence is found for environmental innovations.
    Keywords: Green public procurement, Innovation, Demand-pull, Community innovation survey
    JEL: H57 O38 Q55 Q58
    Date: 2019
  5. By: Neave O'Clery; Eoin Flaherty; Stephen Kinsella
    Abstract: Labour networks, where industries are connected based on worker transitions, have been previously deployed to study the evolution of industrial structure ('related diversification') across cities and regions. Beyond estimating skill-overlap between industry pairs, such networks characterise the structure of inter-industry labour mobility and knowledge diffusion in an economy. Here we investigate the structure of the network of inter-industry worker flows in the Irish economy, seeking to identify groups of industries exhibiting high internal mobility and skill-overlap. We argue that these industry clusters represent skill basins in which skilled labour circulate and diffuse knowledge, and delineate the size of the skilled labour force available to an industry. Deploying a multi-scale community detection algorithm, we uncover a hierarchical modular structure composed of clusters of industries at different scales. At one end of the scale, we observe a macro division of the economy into services and manufacturing. At the other end of the scale, we detect a fine-grained partition of industries into tightly knit groupings. In particular, we find workers from finance, computing, and the public sector rarely transition into the extended economy. Hence, these industries form isolated clusters which are disconnected from the broader economy, posing a range of risks to both workers and firms. Finally, we develop a methodology based on industry growth patterns to reveal the optimal scale at which labour pooling operates in terms of skill-sharing and skill-seeking within industry clusters.
    Date: 2019–09
  6. By: Ganglmair, Bernhard; Reimers, Imke
    Abstract: We use exogenous variation in the strength of trade secrets protection to show that a relative weakening of patents (compared to trade secrets) has a disproportionately negative effect on the disclosure of processes - inventions that are not otherwise visible to society. We develop a structural model of initial and follow-on innovation to determine the effects of such a shift in disclosure on overall welfare in industries characterized by cumulative innovation. We find that while stronger trade secrets encourage investment in R&D, they may have negative e ects on overall welfare - the result of a significant decline in follow-on innovation.
    Keywords: cumulative innovation,disclosure,self-disclosing inventions,Uniform Trade Secrets Act
    JEL: D80 O31 O34
    Date: 2019
  7. By: Huang, Xu; Hu, Yan; Dong, Zhiqiang
    Abstract: The authors explore the impact of artificial intelligence on the economy by improving the neoclassical production function and the task-based model. Based on the capital accumulation of artificial intelligence and technological progress, they present a theoretical model that explores the effect of alternative and complementary artificial intelligence on wages, capital prices, labor share, capital share and economic growth. The model shows that artificial intelligence capital lowers the capital prices and increases wages. In addition, if artificial intelligence and labor force are complementary, artificial intelligence capital has a positive impact on labor share, but if artificial intelligence and labor force can substitute each other, labor share is negatively influenced by artificial intelligence capital. The authors extend the task-based model and find that technological progress increases both wages and labor share by generating new tasks. In the long run, without consideration of exogenous technology, as the artificial intelligence capital accumulates, per capita output, per capita traditional capital and per capita artificial intelligence capital grow at the same rate, and economic growth finally reaches steady state equili- brium. With exogenous technology considered, artificial intelligence technology improves, and sustained economic growth is achieved.
    Keywords: artificial intelligence,automation,economic growth,share of labor
    JEL: J23 J24
    Date: 2019
  8. By: Emanuele Pugliese; Lorenzo Napolitano; Matteo Chinazzi; Guido Chiarotti
    Abstract: We define a novel quantitative strategy inspired by the ecological notion of nestedness to single out the scale at which innovation complexity emerges from the aggregation of specialized building blocks. Our analysis not only suggests that the innovation space can be interpreted as a natural system in which advantageous capabilities are selected by evolutionary pressure, but also that the emerging structure of capabilities is not independent of the scale of observation at which they are observed. Expanding on this insight allows us to understand whether the capabilities characterizing the innovation space at a given scale are compatible with a complex evolutionary dynamics or, rather, a set of essentially independent activities allowing to reduce the system at that scale to a set of disjoint non interacting sub-systems. This yields a measure of the innovation complexity of the system, i.e. of the degree of interdependence between the sets of capabilities underlying the system's building blocks.
    Date: 2019–09
  9. By: Teodora Borota; Fabrice Defever; Giammario Impullitti
    Abstract: In this paper, we document large heterogeneity in innovation policy and performance between old and new EU member states, and present firm-level evidence on the close link between foreign direct investment (FDI) spillovers and eastern European firms' innovation. Guided by these facts and motivated by the pressing debate on further EU integration, we build a two-region endogenous growth model to analyse the gains from innovation policy cooperation in an economic union. The two regions, the West (the old members) and the East (the new post-2004 members), feature firms competing in innovation for market leadership, are integrated via free trade and costly technology transfer via FDI and have different innovation performance and policy. Calibrating the model to reproduce key features of the EU economy, we compare the outcomes of an East-West R&D subsidy war with a coop- eration scenario with unified subsidy across regions, and obtain three main results. First,we find that the dynamic gains spurring from the impact of cooperation on the economy's growth rate are sizable and substantially larger than the static gains obtained internalising the strategic motive for subsidies. Second, our model suggests that the presence of FDI and multinational production alleviates the strategic motive and increases the gains from cooperation. Third, separating FDI and innovation policy generates larger gains from cooperation, a policy complementarity driven by the knowledge spillovers carried by FDI.
    Keywords: Optimal innovation policy, growth theory, international policy coordination, EU integration, FDI spillovers.
    Date: 2019

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